First Time Homebuyer Guide - Part 5
by Pam Simpson
Desoto-Tate County Real Estate

Part 5:  Am I buying a Money Pit?  Inspections

So far, this series has covered:

Part 1  Finding the Agent

Part 2  Finding the Lender

Part 3  Finding the House

Part 4  Making the Offer

Once you have a  signed contract, the transaction moves into the "due diligence" phase.  The title to the property will be examined and this is the time when inspections should be done.  Some inspections are common across the country (like a general home inspection) and some are regional.  For example, in Mississippi, most lenders will require a termite inspection but you will have a hard time even finding someone to do a radon inspection because that is so uncommon in this area. 

The one thing that most first-time homebuyers fear is that they are buying a "Money Pit".  Kind of like the 1986 movie with Tom Hanks and Shelley Long where the young couple buys a fixer-upper and everything they touch falls apart.

If you had your own Buyer's Agent to assist you with the offer, I am sure they suggested getting a professional home inspection.  I can't stress enough how important this is.  Not only to make sure that you are not purchasing a money pit, but also to give you some piece of mind.  If you opt not to have a home inspection, you may have nagging doubts all the way to the closing table.

In Mississippi, home inspectors are licensed by the state.  In order to avail yourself of the home inspection contingency clause, you must use a state-licensed inspector. 

It is not uncommon for a first-time homebuyer to be anxious about the condition of the plumbing, electrical, HVAC, etc and want to have Uncle Bubba come and take a look at it. 

If you wish to have a friend or family member take a look at the home and they are not a licensed home inspector, I suggest you bring them with you to look at the home before you make an offer.  Keep in mind that Uncle Bubba or Pop may still view you as that little freckle-faced 10-year old instead of the capable adult that you are now. 

I usually find that the inspections are best left to the real experts.

It has been my experience that the home inspector will require payment at the time of inspection, so plan accordingly.  It is ALWAYS preferable for you as the homebuyer to be at the inspection. 

I have never attended an inspection where absolutely nothing was found to be amiss.  The home inspector will usually find something, even if it is minor.  The home inspection process is meant to uncover MAJOR defects that would prevent you from purchasing the home (unless repaired by seller).  It should not be used as a hammer to try and get the seller to come down in price or to nickpick about minor issues.  There is no such thing as a perfect house (even a brand new one).

So, what happens if the home inspection uncovers a major issue?  This is where you will refer back to your contract.  It should state what your options are.  Our standard state contracts in MS say that (a) the buyer can terminate and get their earnest money back, or (b) the buyer can waive the items and continue with the purchase or (c) the buyer can ask the seller to repair these items at the seller's costs and continue with the purchase.  Option C can lead to further negotiation as to what the seller will do.

One of the really useful things I have seen in inspection reports is future maintenance guidelines.  Don't overlook this portion of the inspection.  It will come in handy years down the road.

 The last part in the series, "The Closing", is next.

This guide is designed to help first-time homebuyers better understand the overall process and steps in purchasing a home.  There will be 6 parts in this series ranging from finding an agent and lender and the correct loan program for you to what to expect at closing.  It is meant to be VERY elementary in order to help those buyers who are seeking guidance on where to start their quest for home ownership. 

***If you live an area other than Northwest Mississippi, the process could be a little different.*** 

The best guide is your LOCAL REALTOR®.  

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About the author:   Pam Simpson is an Assoc. Broker with Bob Leigh & Associates, LLC in Northwest MS.  Copyright©  2009 by Pam Simpson.  All rights reserved...***First Time Homebuyer Guide - Part 5***

FOR BUYERS:  Buying a Foreclosure, Finding a Home, Loan Info, Tax Credit, Interest Rates,
First Time Homebuyer Guide

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 Disclaimer:  All information provided by this author may be  based on information collected from several sources and is believed accurate but not guaranteed.